Excite CEO: Why Excite didn't buy Google (2014) [audio]
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That reveals, I think, the actual error in Excite's strategy: not realizing that "internet search" was the real prize deserving all the attention. That mis-prioritization is what led to accepting the merger with @Home just a little before these Google discussions. That's also why they mainly evaluated Google on some static set of then-common queries. That's why they were satisfied with their existing search results – which by my recollection, were for a while the clearly "most relevant" of then-extant options. Their tech stack & team had been quite good, and certainly seemed "good enough" as just one small part of the particular larger game they thought they were playing.
Had Excite accepted Page's requirement, the tech/team switchover might've been rocky, and I suspect at best Excite would've remained relevant in search for only a little while longer. But the same distractions & headwinds that bankrupted Excite@Home by the end of 2001 likely would've felled the company even with the addition of Google's nascent potential. Google's best talent, including Page & Brin, wouldn't have stayed around for long. (And in the actual history of an independent Google, it still raised tens-of-millions in additional venture investment to give them the time/resources to perfect their model – runway that might not have been available inside Excite.)
It was the earlier choice to emphasize the "last mile" cable-internet business and monthly subscription revenues, via the merger with @Home, that sealed Excite's fate. It nudged them away from buying Google, sure, but also put them on a path where even buying Google couldn't have saved them.
In my eyes this was not a mistake on Excite's part and is only being treated that way because Google happened to become successful after the fact.
Excite's key mistake was before any Google negotiations: when Excite demoted search to be just one part of a larger strategy – which apparently involved a lot of distracting politics with cable companies – instead of search being the strategy.
(Of course, as a high-flying public company needing to report results in 1999, 2000, etc, that potential cable-subscriber revenue sharing – recurring revenue from millions of subscribing households! – must've been very tempting for Excite. The scale & margins ultimately possible with keyword-based, pay-per-click ads were still speculative in 1999. Google Adwords only launched in late 2000, using CPM-impressions pricing, and only added pay-per-click keyword bidding in 2002.)
The buyout/merger/etc led to an inaccurate version of their theme jingle in my head too: "I don't wanna grow, I wanna buy a crappy web portal..."
What made Page & Brin Google's best talent?
There is a long history of companies crushing the innovation they buy, and it is not necessarily a top-down effect. Page had good reason to make this issue a deal-breaker.
https://www.linkedin.com/pulse/business-model-fire-insurance...
In short I was making the point that large corporations should deliberately invest in start-ups that directly attack their own current business model. Think of this as a way of stress testing your business model with the benefit that you own a stake if the attacker happens to succeed. Side benefit, those start-ups that fail will have small teams of technically talented people who now know your market, and are now needing an acquire-hire. Pick through and hire the best out of the failed efforts.
The most famous example I can think of is Microsoft heavily investing in Apple when Apple was just about at its low-point.
There are similar areas of business today, transformative, and underfunded because the value is too far in the future for most investors.
Perhaps, like judgement day, Google was inevitable.
These were: uncluttered search-only, instead of a portal filled with junk; no paid-placement; it was also faster due to clever backend, so an acquirer could save money on the backend, bringing it down to adequate speed.
Some argue that The Algorithm (pagerank) wasn't important for google's success at all, except as marketing to geeks, because search results were comparable to alternatives.
Today, apart from consumer habit, google's biggest advantage is speed, possible by massive capital investment in datacenters.
But also today, google is hamstrung by money (Wall St), making them vulnerable, as previous search was.
OTOH the problem/need was there, maybe eventually there would have been another google targetting search-only.
As an early user of Google I vehemently disagree. That better results was not due to PageRank alone is well understood.
Google was just fast and ad-free, unlike AltaVista, which was ad-infested and slow. That was the attraction for myself and the other people I knew who used it.
Getting the top quieries right is relatively easy by hand, the real question is how the engines performed on random queries.
"Are you Sarah Connor? ... You've been served."
So yeah, the idea doesn't need a lot of tweaking for a lawyer terminator to exist. They already do whatever they need to for their goal, they aren't just killing machines.
No, it would involve lawyers.
"Mission failed!"
"What happened?"
"Terminator 7 was not a good cultural fit at Akin Gump."
"Okay, roll out Terminator 8, but this time make sure he isn't quite as serious. Send him back..."
The main reason it was successful back in the day was because it was fast, clean and had no ads. Any company that acquired them would sort those out pretty quick.
With a human curated directory, you will instead find that whatever terms you add, you always get dumped back into the same box of hand built pages of results. Once you’ve mined those out, this will get really frustrating.
http://aautar.digital-radiation.com/blog/uploaded_images/goo...
Some other search engines were even more heavy handed on advertising.
I’m very glad they weren’t acquired.
I mean, if he had flipped a coin on each decision, his expected outcome would Have been higher.
- what if Excite bought Google and killed it. And kept buying all competitors before they become a threat .... like Google does these days.
- following from there: which companies have been bought and killed off so that the future we could have had was sacrificed on the altar of existing companies defending their own turf.
- following even more: Which innovation are we not seeing because the huge business model desert created by the dominant advertising model (which now turned into surveillance model).
When do you ever need to do that, rather than doing the redesign and then publishing it whenever it's ready..?
"they tested was “Internet.” According to Hassan, Excite’s first results were Chinese web pages where the English word “Internet” stood out among a jumble of Chinese characters. Then the team typed “Internet” into BackRub. The first two results delivered pages that told you how to use browsers. It was exactly the kind of helpful result that would most likely satisfy someone who made the query. Bell was visibly upset. The Stanford product was too good. If Excite were to host a search engine that instantly gave people information they sought, he explained, the users would leave the site instantly. Since his ad revenue came from people staying on the site—“stickiness” was the most desired metric in websites at the time—using BackRub’s technology would be counterproductive."
I am sure there were many other search plays at the time and picking from one was just like picking a crab from a barrel.
I doubt investors, who do this everyday and win some and lose some, worry all the time about why they passed on Google.
So it's important to remember that an investor who passes on a product that goes on to become very successful may have actually made the best possible decision given the information that she had.
A good investor will take losses and missed opportunities and re-evaluate their decision making process, but they have to be careful not to over correct or the could make another mistake in the opposite direction.
> I doubt investors, who do this everyday and win some and lose some, worry all the time about why they passed on Google.
A very famous investor once said to me "you either invested in Google or you lost money."
Google is up 4000% since its 2004 IPO and 1000% from local bottom during the housing bubble crash. Didn't even need to be a VC to get access to VC level gains buying GOOG.
That's a great point. Anyone who shits on a VC for not investing in Google ought to be asked how much Google stock they bought in 2004.
4000% gains is better than most VC get on even the best exits and that opportunity was open to EVERYONE.
You could get a good estimate of this just checking Crunchbase. Assuming the company is doing well, none of the weird stuff like ratcheting kicks in. So just look at how much money went in and what valuation, apply dilutions for later rounds, and calculate what percentage you own by the time you get to an IPO.
This method still isn't perfect (employee option pools being adjusted will not show up, as well as other possibilities), but it'll definitely give you a rough estimate.
For me, it was after the year 2000, two years after Google was incorporated.
Having Google access via mobile in 2000 was living in the future. Folks would treat me like an oracle.